Along with Bitcoin, Ethereum is one of the most critical blockchains ever developed. Ethereum shifted the world’s attention from cryptocurrencies to its underlying technology, blockchain. Even so, the blockchain has faced many challenges, but enthusiasts believe that Ethereum (ETH) is considered solid money.
Various models of healthy money have existed throughout history. The newest is the gold standard. If anything, healthy money has been difficult to pin down because of the central banks’ reserve requirements. These policies have resulted in endemic global inflation. Well-known economist and philosopher FA Hayek said in 1984 that the only healthy money is an accepted currency that is free from state control.
Ethereum (ETH) is far from dead
According to Nick Szabo’s Shelling Out: The Origins of Money, healthy money must be a store of value. In addition, it must act as a medium of exchange and retain its value over time. This form of money is hard, scalable and divisible. Easy Money’s offering can easily be expanded, making it an ineffective store of value. Gold is hard money because of its rarity. However, it is not easy to share missing a trait of this ideal form of cash.
Ethereum started as a revolution, with its values rising from $ 9.50 to $ 1,500 in the ICO era. The next year the values plummeted below the $ 80 mark. This monumental slide came when startups used ETH for their ICOs, sold them for fiat or stablecoin, and were made worse by regulatory crackdowns on fraud projects. When ETH prices fell, startups were increasingly selling ETH.
In 2018, the supply of ETH was at an all-time high and increasing government regulations, and the review of ICOs has continued to shrink the demand for tokens. Soon a news article began stating that Ethereum was dead. Nevertheless, the leading dApp blockchain is now mature.
Ethereum (ETH) is a triple point asset
It has more regulatory compliant ICOS producing viable market projects, as opposed to those of the big ICO mania of 2017. Ethereum will also move to Ethereum 2.0 and work on an energy efficient and scalable proof-of-stake system. This revitalized Ethereum will not only reduce energy consumption, it will also be faster, cheaper and more efficient.
The value of Ether (ETH) is therefore expected to increase as developers embark on this mission. The value of ETH will not only be that it acts as the reserve currency of a major economic network, but also as a triple point asset. Ryan Sean Adams explains this concept with the words
“When Ether is paid into a staking contract, Ether acts as an investment, like USD in a T-Bill – plugged Ether generates an Ether-denominated return that secures the Ethereum economy.”
1 / Ethernomics 101
Aside from the technical, most people don’t know what Ethereum really is or the basic reasons why Ether is so valuable
One thread …
– Ryan Sean Adams – rsa.eth 🏴 (@RyanSAdams) May 16, 2019
Second, ETH pays for gas in the Ethereum economy and the utility included in it will be attractive, which will attract demand, which will then drive prices up. Consequently, as the Ethereum economy matures, the demand from ETH will increase sharply. Third, Adams adds:
“When locked in a secured loan, or loaned for interest, or kept in a savings account, Ether acts as money like USD – as the Ethereum economy grows in size and influence, and Ether is increasingly used as money, Ether’s monetary reward increases. “
Much of ETH is locked in DAOs, DeFi apps, and Maker CDPs collateral. As a result, ETH inflation will decrease. Constantinople’s EIP-1234 upgrade will also reduce the block reward from three to two, further reducing ETH inflation. The ETH supply will therefore inevitably decrease over time, limit its supply and assume the characteristics of healthy money.
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